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CHRISTIANE AMANPOUR, CNN ANCHOR: Tonight, Afghanistan. Does U.S. President Barack Obama suddenly find himself searching for a strategy?

Good evening. I'm Christiane Amanpour, and welcome to our new program. This week, we're going to focus on Afghanistan. Our mission is to take all that we've witnessed in the field and try to bring more depth and understanding to the stories that matter, to humanize the headlines and all the breaking news that's constantly bombarding us.

And so today, an urgent new assessment by the U.S. commander on the ground in Afghanistan: More troops are required, he says, or the mission will likely fail.

We'll speak exclusively to the Afghan president, Hamid Karzai, who's battling an insurgency, as well as these constant accusations of corruption and election fraud.

Funerals this morning in Italy for six of their soldiers, as well as mounting Afghan casualties show the human cost of the war there, as public support for it plummets across Europe and in the United States.

We'll also talk exclusively to the man tasked with finding a solution, U.S. Special Envoy Richard Holbrooke. We will ask them both: Is it still possible to win in Afghanistan?

First, President Hamid Karzai joins us from his palace in Kabul.

Welcome, Mr. President.

HAMID KARZAI, PRESIDENT OF AFGHANISTAN: Thank you.

AMANPOUR: The election commission just gave you above 50 percent, close to 55 percent in the recent election. Are you ready now to declare victory?

KARZAI: In terms of the percentage of vote declared by the election commission, well, I'm the first. But in terms of the announcement of the winner, we should allow the election commissions of Afghanistan to make that determination after they have done all their legal procedures.

AMANPOUR: Because they're still investigating the allegations of corruption. Do you think there's a chance that your percentage will go down, as some suggest, once the investigation is complete?

KARZAI: Well, we have to study the election, the voting system itself. If there is fraud committed by any side in the election, of course, that will be a very serious issue, and I'd very much want that investigated.

But if there's a political desire to take the -- to take the election to the second round, of course that's not acceptable.

AMANPOUR: And if there's a legal reason to take it to a second round, you will accept that?

KARZAI: If it's in the consequence of the vote of the Afghan people, if the vote of the Afghan people has no clear winner, then, of course, that's the will of the Afghan people, and the Afghan law says go to the second round.

AMANPOUR: Let me ask you something else and whether you'll accept this. General McChrystal, the U.S. ISAF commander there, has now written a new assessment in which he is saying that more troops are required. Let me read what he's just said: "A properly resourced strategy is imperative. Failure to provide adequate resources also risks a longer conflict, greater casualties, higher overall costs, and ultimately a critical loss of political support. Any of these risks, in turn, are likely to result in mission failure."

That's General McChrystal. Do you support -- do you want more U.S. troops in Afghanistan?

KARZAI: I have seen General McChrystal's report. He came and presented it in full form some three weeks ago. I found some very important elements in that report that I fully back.

One of the most important was, rather than concentrating on killing and eliminating terrorists and the Taliban, the report talks of protecting the Afghan people, the -- the -- the communities, the civilians. This part has my full support and also, surely, the support of the Afghan people.

Where General McChrystal is asking for more resources, in all aspects, to boost the effort against terrorism, he has our support there -- there, too, fully.

So the overall report, as far as Afghanistan is concerned, is one that has the right approach, and we back it.

AMANPOUR: So that's including more troops. Let me ask you to take a listen to an interview I did with you in Kandahar eight years ago, just before you even became at that time interim leader of Afghanistan. Listen to this for a second.

(BEGIN VIDEO CLIP)

AMANPOUR: Mr. Karzai, here we are sitting in Kandahar, surrounded by tribal elders and leaders. In about a week's time, you're going to take the helm of a new government for Afghanistan, an interim government. The future is about to begin. What is going through your head right now?

KARZAI: It's an exciting time. It's a new beginning for Afghanistan after many years of disasters and bloodshed and suffering for our people. I think Afghanistan will be peaceful, will be stable. And it will be peaceful and stable because the people want it, the Afghans want it. And it will be peaceful and stable because the international community is helping.

(END VIDEO CLIP)

AMANPOUR: Mr. Karzai, today that just seems so long ago, not just in years, but in what you predicted back then, that it would be peaceful and stable, that this would be an exciting new opportunity. Do you see how different things have turned out, how different the mood is, not just about Afghanistan, but about yourself?

KARZAI: Well, the -- much of what -- much of what I predicted for Afghanistan did happen. We evolved from a country without a government and straight structures into a country with a straight structure and a government with a constitution, with a democracy, with a free press, with a much better economy today. In 2002, when you and I were talking, Afghanistan's income per capita was less than $180, around $150. Today, it stands at nearly $460.

And -- and all of this was possible because of the help that the international community gave us, because of the help that America gave us.

Now, the other side of is, peace in the country, yes, we have not been lucky with that, and for reasons. The reasons are that our partners in the international community did not concentrate on the sanctuaries for terrorists outside of Afghanistan. We -- we said nearly five years to -- to six years not even agreeing upon the existence of sanctuaries beyond our borders.

Taliban, who laid down their arms and settled down back in their villages, were (inaudible) for no reason. They were harassed. They were intimidated. Villages were searched. Villages were -- were -- were intimidated. Naturally, that is going to have a repercussion, and we are suffering the consequences of that today.

AMANPOUR: Do you personally feel any sense...

KARZAI: Including under-resourcing the struggle.

AMANPOUR: Do you feel any personal sense of failure, this place is not peaceful and stable for reasons you've just announced, plus you, yourself, and your government is under accusations of corruption, the election is being investigated still? Do you feel any sense of failure from those heady moments eight years ago, when everything seemed possible?

KARZAI: Well, well, when you began a journey as difficult as that and with -- with as great hopes as -- as -- as we had in the beginning, and where we were all in a hurry, there was bound to be success, there was bound to be difficulties, there was bound to be failures.

We have achieved success in certain years, of which we together should be very proud, the Americans, the rest of the world, and the Afghans. There are difficulties that we have which we should try to overcome. There are problems -- there are failures that we have, which I'm happy to see there is -- there is a re-thinking in the United States, as well, on -- as to the causes of these failures and how to correct them.

AMANPOUR: Can I ask you a question? Because this goes to the heart of the matter. Obviously, the United States, Western governments have to decide now whether to put more troops into Afghanistan. And questions are being asked here in the United States and across Europe, why should sons and daughters be sent to die there, to be killed there for this war if even the government is not credible, if even their accusations of this massive corruption and -- and, frankly, failure in many of the -- of the vital organizations? And even General McChrystal's report says that, that the government is so riddled with corruption that it is as dangerous as the insurgency to the stability of Afghanistan.

KARZAI: I disagree with that completely. The -- the Afghan government is credible and legitimate. It's a government that lacks resources. It's a government that lacks capacity. It's a government that has to be built up further with the right kind of resources that we're lacking, especially in the sector of police, on which we were busy right from 2004 onwards with our partners in the international community to -- to strengthen and to -- to train, which didn't happen.

Attention to the police began to come only after immense bickering and arguments in which the Afghan side was asking for training of the police and the international side was avoiding that -- that responsibility.

AMANPOUR: Well, let me just ask you this...

KARZAI: Only from 2007 onwards, we have began to receive some support. On -- on corruption, ma'am, the part of corruption that is in the Afghan government, we fully take responsibility for. Afghanistan has that problem, and Afghanistan has to correct it. It's a -- it's a -- it's a government that has -- that has just began after three decades of war and lack of any institutional arrangement in this country.

And we are working hard to correct it. It will not be corrected tomorrow. It will not be corrected by accusations. It will be corrected by hard work and dedication on both sides. Now, I'm not going to take responsibility...

AMANPOUR: On that note, sir...

KARZAI: ... as the Afghan president or the Afghan people for the corruption in the distribution of international assistance by -- by -- by faulty contractual mechanisms, by awarding contracts from one to the second to the third to the fourth, by wastage of resources along the way. That's a problem that the international community has to fix. We will fix our problems, and our partners should correct their own problems.

AMANPOUR: On that note, we're going to have to leave it. And we will hopefully continue our discussion with you on another occasion. Thank you very much, indeed, for joining us, as the world watches what exactly is going to take place in Afghanistan.

We will have much more on this story on our Web site, cnn.com/amanpour, and you can also vote in our poll there. Can the Taliban be defeated?

Next, Richard Holbrooke, a man who's had his differences with President Karzai.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KARZAI: The Afghans have learned a bitter lesson. So have the international community. So have the United States. I must be very blunt. If the world does not pay attention to Afghanistan, if it leaves it weak and basically a country in which one can interfere, all these bad people will come again.

(END VIDEO CLIP)

AMANPOUR: That was President Hamid Karzai talking to me in Kandahar, Afghanistan, eight years ago. And joining me now here in the studio, the U.S. special representative for Afghanistan and Pakistan, Richard Holbrooke.

Welcome.

RICHARD HOLBROOKE, U.S. ENVOY TO PAKISTAN AND AFGHANISTAN: It's good to be with you, Christiane, on your first show, but where are you combat fatigues?

AMANPOUR: Well, it's a good thing you -- you noticed that. And let me get straight to combat then.

HOLBROOKE: Actually, maybe these are your new combat fatigues.

AMANPOUR: They're my new combat fatigues. But let's not forget the field. General McChrystal, the new U.S. commander -- talking about combat fatigues -- has said that it will take more troops, it simply will, or else the mission will fail. Agree or disagree?

HOLBROOKE: Well, this is a classified report that unfortunately leaked as it's being discussed internally. And I'm not going to say anything more about it.

AMANPOUR: From all of the places you've been, whether it be Vietnam, whether it be Bosnia, where we worked very closely together in terms of me covering what you were doing there, you called for troops and intervention, and that did settle the situation. You were able to negotiate a peace. Would more troops in a place like Afghanistan work?

HOLBROOKE: I think the president's decision to send 17,000 more troops in February and another 4,000 trainers in March was absolutely indispensable to avoid a catastrophe, and I think that was the right decision to go.

But I think it would be quite improper of me to foreshadow discussion that is just underway with an outcome that is yet to be determined. It's up to the president to decide that as commander-in-chief.

AMANPOUR: I understand that. In that case, let us play this bite, this sound, this bit of an interview that President Obama said on CNN yesterday.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We are in the process of working through that strategy. The only thing I've said to my folks is, A, I want an unvarnished assessment, but, B, I don't want to put the resource question before the strategy question.

(END VIDEO CLIP)

AMANPOUR: So this is what I don't understand and other journalists don't understand, either. Eight months into the administration, why is it not clear what the strategy is?

HOLBROOKE: On March 27th, the president made a major speech to the nation and the world laying out our strategy. He is going to review every aspect of our situation before he steps up and makes a decision as to whether to send more young American men and women and those of our allies, if they join us, into harm's way. That's perfectly appropriate.

Of all the things a president does, it is commander-in-chief responsibilities, as he has said in interviews, carry the heaviest consequences. And he wants to scrub everything down again. I applaud him for that. I've worked with presidents since Lyndon Johnson in situations of comparable degree of difficulty and complexity. And I've never seen a president drill down more deeply with more precision as he approaches decisions of such consequence. And that's really as far as I want to go.

AMANPOUR: General McChrystal has said that it needs to happen within 12 months. Without addressing the issue of President Obama and what decision he'll make, is it possible to get more troops on the ground and all these resources that General McChrystal wants? Otherwise, he says, it will be nigh on impossible to push back that insurgency.

HOLBROOKE: I'm not going to...

AMANPOUR: Are you concerned about the strength of the insurgency?

HOLBROOKE: Look, I -- I know Stan McChrystal quite well. He's a great general. I admire him greatly, and I've had private talks with him. But I'm not going to comment on a quote out of context on an issue such as this.

AMANPOUR: Are you concerned about the strength of the insurgency? Did you think we'd be here eight years and eight months later?

HOLBROOKE: Christiane, as you know, when I had my monthly column for the "Washington Post," I wrote flatly that this would be a tougher war than Iraq, it would last longer than Iraq, and it would probably become the longest war in American history, if we were going to prevail.

So let me go to the core point: Why are we in Afghanistan? It is because of 9/11, it is because the people who planned and staged the attack on the United States in -- on September 11, 2001, are still out there calling for continued attacks on the U.S., calling for Pakistani nuclear scientists to give nuclear capability. And as the president laid out in March, we cannot turn away from that.

Now, you mentioned Vietnam. A lot of people ask me about Vietnam, because I spent three-and-a-half years there and seven years working on it. So let me be clear: There is no similarity between the two countries in terms of their national importance.

HOLBROOKE: Structurally, there are some similarities. President Karzai mentioned the most important one to you in your interview with him, and that's the Pakistani sanctuary. But in terms of consequences, the Viet Cong, the North Vietnamese posed no threat to the homeland of the United States. Al Qaida does.

The Taliban is Al Qaida's protective cordon. They work together. They are our enemy. Our nation is at risk. I have no question about that. And the American public and the world must understand the differences between these other wars, including Iraq, and this one.

AMANPOUR: In that case, do you think the war in Afghanistan needs to be sold, to be sold better? Where are the administration officials selling this war...

HOLBROOKE: I'm...

AMANPOUR: ... convincing the American public of what you're just saying?

HOLBROOKE: I don't know what you mean by "sold." You don't sell a war. You explain...

AMANPOUR: You have to explain it.

HOLBROOKE: You explain its reasons. That's what I'm doing on your program today. That's what the president has done. That's what we do. I meet with Congress all the time. I meet with journalists. It's up to the American public to make its judgments.

The Congress is critical here. We need their support. But I'm not in the selling job. I'm in the job of helping the secretary of state -- I work for Hillary Clinton -- and through her, for the president, to do everything I can to prosecute the civilian side of the war.

AMANPOUR: OK, well, let's talk about the civilian side of the war. Everybody says -- I think you've said it before, President Karzai says it, even President Obama and General McChrystal -- that the Afghan civilians have to be taken care of, not just protected, but taken care of. That bit of the interview we -- we showed just a few seconds ago talked about promises made and promises broken in the past.

I was just there on the ground. The civilian effort, do you agree, needs to be as intense as the military effort?

HOLBROOKE: The president and the secretary of state have ordered us to have a vast civilian build-up, vast by civilian methods. You don't -- civilians, you don't send tens of thousands of people. You don't send 17,000 troops, as -- as -- as we did in February and March, who are still arriving, I might add. You send hundreds. And each American civilian direct hire carries a footprint of about 10 other people.

We are building up rapidly. We have hundreds of Americans pouring in, agronomists. We're really building up agriculture. Civil society, rule of law, strengthening the government's capacity, they're all coming in at a very rapid clip. Ambassador Eikenberry is overseeing that process on the ground. We're doing it in Washington. It's moving very rapidly.

AMANPOUR: Fast enough?

HOLBROOKE: Fast enough, that depends on the results. Let's see how it goes.

AMANPOUR: I mean, just as an illustration, when I was just there, we were at -- at an area where there were troops and civilians. And it was at an airfield. We couldn't get out, because after eight years, the airfield still hadn't been paved. Anyway, let's move along...

HOLBROOKE: That's not -- that's not what we do.

AMANPOUR: That's in Chaghcharan.

HOLBROOKE: That's -- but that's not what we're doing.

AMANPOUR: No, but roads and all of those kinds of things need to be done.

HOLBROOKE: Roads, we do -- we've built a lot of roads, but did we build enough? No. As President Karzai said to you, the last administration took its eye off the ball, focused on Iraq. Everybody knows that. We inherited a lot of complexities, including the most serious, a delayed election, and now we are where we are.

The president ordered a massive increase in civilian effort as soon as he took office. That is well underway. It's going very well. The quality of the people going in is phenomenal. We invite outside people to apply for jobs. We've had thousands of applicants. We're moving.

AMANPOUR: You mentioned Vietnam and the -- and what's similar and what's dissimilar. In Vietnam, there was an enemy that -- that was identifiable. Let's go to Bosnia and Serbia and what happened during the Yugoslav conflict. When you were negotiating peace, you had two sides that you could negotiate with.

HOLBROOKE: Three sides.

AMANPOUR: Three sides. You're right.

HOLBROOKE: Thank you.

AMANPOUR: Here, who else? Who are you able to identify? How do you bring peace in this situation? Is there another side that you can identify and bring in to the -- to the tent?

HOLBROOKE: This is one of the most complicated issues we face, because a lot of the people fighting with the Taliban are not committed Taliban. And I would say well over half are just farmers, kids without jobs who want guns. The Taliban pays them. They're not ideologically committed to the loathsome ideology of Mullah Omar and company.

So, as Secretary Clinton said in her July 15th speech, we believe that there's room for these people to come back into the fold, as long as they renounce Al Qaida -- that's the key thing -- renounce violence, and integrate into the process. She laid that out. It is our core position.

We understand fully that the bulk of the people are on -- who are fighting are based on misguided information they get from false propaganda.

AMANPOUR: And apparently being recruited in the -- in the prisons, as well, right now. But can I ask you this?

HOLBROOKE: Absolutely.

AMANPOUR: You have had your differences with President Karzai; there's been quite published reports about that. Obviously, the United States is very concerned about the state of the election. Is this a government -- is this a president that you, the United States, can continue to work with? Is it credible?

HOLBROOKE: If Hamid Karzai is determined to be re-elected by the independent election commission, as reviewed by the election complaints commission, the two he referred to in his interview with you, if that's the outcome, we are more than prepared to work with him. We will be looking forward to working with him again.

We respect the process. We don't have a candidate. We support a process which creates legitimacy. And if that results in Hamid Karzai, we're fine with that.

You talk about my so-called differences with him. I think these are much exaggerated by journalists. We have honest, frank talks, as befits a representative of a country which has 68,000 troops at risk and the president of a country. And that's how it should be.

We speak frankly and honestly to each other. But I have great respect for him and his leadership, as does Ambassador Eikenberry, as does the whole administration, as Secretary Clinton, and we will work with him after the election, if that's the outcome.

AMANPOUR: And on that note, thank you, indeed, for joining us. And we will ask you on our conversation, as we continue, whether, in fact, this war is still winnable. Our conversation won't end here. We're trying something brand new, as I just said. We're going to continue live on the Internet. So go to our Facebook page, facebook.com/amanpourcnn.

Thank you for watching. We will be back tomorrow with more on Afghanistan and NATO's role there. We'll be talking to the new secretary general of NATO. So goodbye from all of us here, except for you, Richard. We're going to go off now and continue. And I want to know from you whether you think this is still winnable.